There is another twist to the demand of foreign airlines operating in Nigeria for their $600 million trapped in the country’s foreign exchange sourcing difficulties.

The foreign airlines collect Naira for their tickets from customers and exchange same for foreign currencies for their operations. But recently they said the they have been unable to get the exchange executed through the official foreign exchange market due to scarcity of foreign exchange resources.

However, the Airline Operators of Nigeria, AON, is now saying that the money is not trapped, advising the foreign airlines to go to the parallel market to exchange their Naira revenue.

AON maintained that the foreign airlines’ demand is not legitimate, adding that the Central Bank of Nigeria, CBN, should not be dragged into their plight, adding that there is also the option of Investors and Exchange Foreign Exchange, I&E FX window where they can access forex.

The AON noted that local airlines have the capacity and the aircraft to fly passengers from Nigeria to other countries but are being denied the opportunity by other countries.

But stakeholders also argued that 80 per cent of commercial aviation earnings come from foreign airline operations and that domestic airlines need to move their operations to international territories where they can earn huge income.

Also, an African aviation management consultancy and operational service provider based in London, Dre aviation, lamented that it is absurd forcing any member of the international aviation community to the parallel market (also known as black market) to source forex for repatriation of their profits.

*BASA challenges

Meanwhile, finding indicates that with the over 95 Bi-Lateral Air Service Agreements, BASAs, with countries around the world, the country is only able to reciprocate six per cent since inception, whereas, 27 countries fly into Nigeria.

BASA is a bilateral aviation safety agreement that facilitates the technical assessment process of two signatory countries.

According to the Principal Managing Partner, Avaero, Sindy Foster, “Nigeria has signed over 95 Bilateral BASAs with countries around the world. Currently, 27 airlines fly in Nigeria. However, only Air Peace flies internationally to eight countries, with two new routes coming soon.

“For the first two years of operation the national carrier will be competing with the domestic airlines, so will not be doing anything towards implementation of BASA agreements.”

*Violation of BASA

Reacting to the foreign airlines’ demand, the Chairman of United Nigeria Airlines, Obiora Okonkwo, noted that the Nigerian government has not in any way violated its BASA with the airlines.

He noted that the CBN does not regulate how much airlines sell their tickets, adding that, “They have also given a public notice that there is a scarcity of forex, and companies can go source their funds from the parallel market.

“There are many parallel markets, we do source from I& E windows, the only difference is when you have to buy from CBN, it could be coming at about N450 to $1 and in I&A window, you can negotiate and it could be sold at N650 to $1.

“If we the local operators can do that, what has anybody done to offend the BASA agreement when you are asked to go source from other places? Their money is not confiscated, nobody says they should not repatriate, but it is just simply going to other places. Why are these airlines not doing this?

“I am happy they are calling for meetings, but I hope the agenda would include how much they are selling their tickets because their ticket prices are in foreign currencies and converted to Naira.

“As long as their ticket for instance is $5,000 and the value Nigerians are paying for it is N2.5 million, which is about N450 to $1, then I have a legitimate case to say we are bound by this rate. But since they are free to fix their ticket price at a rate that would enable their business to move on, you cannot sell at the rate of N700 or N800 and come back to say you want to transmit your money at N450.

“When we talk about this, it looks like they have not been getting their money, last two weeks, there was a huge chunk of money that was made available for Emirates airlines in particular, We the AON kicked against it because we have a lot of invoices lined up in different banks.

“This forex issue is affecting everybody. Today, manufacturers go to the bank to put in an invoice of $1 million and at the end of the day they might be lucky to get $50,000.

“In a situation like this, these airlines could have a more creative way of spending their money, if there are bills they are paying in foreign currency they could negotiate with the Nigerian Civil Aviation Authority, NCAA, or other authority to give them a waiver so that they can use Naira to pay for these bills.

“If they want $400 million as at today, they can talk to about two or three banks in their country who will get them an I & E window of N700 and this will be over, if we the local operators can do that, why can’t they?

“We are watching, if CBN can give them the said amount, we will be happy because we know the money is there. We will also put up our bills which are also landing. They should also give us local operators as foreign airlines cannot be given preferential rates.”